Taylor Bean’s Farkas Loses Bid to Overturn Convictions

June 20 (Bloomberg) -- Taylor Bean & Whitaker Mortgage
Corp.’s ex-Chairman Lee Farkas lost a bid to overturn his
convictions for orchestrating a $3 billion scheme prosecutors
said was among the biggest bank frauds recorded in the U.S.

The U.S. Court of Appeals in Richmond, Virginia, today
found nothing in Farkas’s trial that would warrant reversing any
of his 14 convictions, rejecting arguments he was deprived of a
fair trial.

“Having carefully considered Farkas’s contentions in light
of the record presented to us, we discern no reversible error,”
Circuit Judge Andre Davis wrote for the three-judge panel.

The decision “concludes the successful prosecution of over
a half-dozen corporate executives less than three years after
the multibillion dollar fraud was uncovered,” U.S. Attorney
Neil MacBride of the Eastern District of Virginia said in the
statement.

Davis said that the federal court was correct in allowing
the trial to take place in the Eastern District of Virginia, in
appointing a lawyer to defend Farkas, in limiting cross-examination of a witness and in giving instructions to the jury
about the meaning of “beyond a reasonable doubt,” among other
challenges raised by Farkas in his appeal.

‘Fraud Scheme’

“Farkas and his co-conspirators engaged in a multistage
fraud scheme between 2002 and 2009, while Farkas was chairman
and principal owner” of mortgage-lending company Taylor Bean,
Davis said.

Farkas was found guilty of bank, wire and securities fraud
in April 2011 and sentenced to 30 years in prison.

Prosecutors said the scheme was one of the U.S.’s largest
and longest-running bank frauds, which duped some of the
country’s biggest financial institutions, targeted the federal
bank bailout program and contributed to the failures of Taylor
Bean and Montgomery, Alabama-based Colonial Bank.

“We aren’t surprised by the ruling but obviously are very
disappointed for Lee,” said David Coorssen, Farkas’s lawyer, in
a telephone interview. He said hadn’t yet been able to discuss
with his client whether to request a review by the Supreme Court
or to file a claim that Farkas had been deprived of competent
counsel during the trial.

The district court case is U.S. v. Farkas, 10-cr-00200,
U.S. District Court, Eastern District of Virginia (Alexandria).
The appellate case is U.S. v. Farkas, 11-4714, U.S. Court of
Appeals for the Fourth Circuit (Richmond).